Comments on: Don’t believe the hype http://blogs.reuters.com/great-debate/2009/09/17/dont-believe-the-hype/ Fri, 24 May 2013 19:36:13 +0000 hourly 1 http://wordpress.org/?v=3.4.2 By: Gastone Ciucci Neri http://blogs.reuters.com/great-debate/2009/09/17/dont-believe-the-hype/comment-page-1/#comment-24488 Gastone Ciucci Neri Sat, 19 Sep 2009 20:02:56 +0000 http://blogs.reuters.com/great-debate/?p=5363#comment-24488 The recent rise of the stock market has been due mainly to shorts squeeze and speculation. How can the solution for debt and consumption be more debt and more consumption? The system is the same, the debt hasn't disappeared. The debt is still out there. The rise of the stock market hasn't solved the problem, it made it worse. Officials want consumers to start to spend again. But government leaders can hardly afford to urge consumers to spend, spend, spend. Excessive consumer spending for the last 25 years is one of the main reasons for the current financial mess and the worst recession since the 1930s. If everyone saves and few spend, the economy suffers , if we start again with excessive spending we never get out of this mess. The recent rise of the stock market has been due mainly to shorts squeeze and speculation.
How can the solution for debt and consumption be more debt and more consumption?
The system is the same, the debt hasn’t disappeared. The debt is still out there. The rise of the stock market hasn’t solved the problem, it made it worse.
Officials want consumers to start to spend again.
But government leaders can hardly afford
to urge consumers to spend, spend, spend.
Excessive consumer spending for the
last 25 years is one of the main reasons
for the current financial mess and the
worst recession since the 1930s.
If everyone saves and few
spend, the economy suffers , if we start again with excessive spending we never get out of this mess.

]]> By: Casper Lab http://blogs.reuters.com/great-debate/2009/09/17/dont-believe-the-hype/comment-page-1/#comment-24393 Casper Lab Fri, 18 Sep 2009 10:37:36 +0000 http://blogs.reuters.com/great-debate/?p=5363#comment-24393 Good article. 'doling out cash to shareholders’ - the way it is going now, they will have to dole in, and quite soon'. My feeling is that inflation stats have always been incorrect and quoted too low, for whatever reason. As an example, if we are really in 'deflation', the Fischer Effect kicks out real returns higher than nominal returns for bonds. That is obscure though. I think we have been in hyper-inflation for a long time, we just thought things were cheap, so we bought them on credit. Terrible domino effect. Yes, and the derivatives bit us, but that mistake was made by an eclectic group of Ken and Barbie gamblers. Good article.

‘doling out cash to shareholders’ – the way it is going now, they will have to dole in, and quite soon’.

My feeling is that inflation stats have always been incorrect and quoted too low, for whatever reason. As an example, if we are really in ‘deflation’, the Fischer Effect kicks out real returns higher than nominal returns for bonds. That is obscure though. I think we have been in hyper-inflation for a long time, we just thought things were cheap, so we bought them on credit. Terrible domino effect. Yes, and the derivatives bit us, but that mistake was made by an eclectic group of Ken and Barbie gamblers.

]]>